Eni signs Niger Delta PSC

Eni has signed a production-sharing contract (PSC) with Nigerian national oil company NNPC for the OPL 135 exploration license. The area lies northeast of the Niger Delta near the Kwale/Okpai treatment plants, operated by Eni.

Offshore staff

Milan, Italy -- Eni has signed a production-sharing contract (PSC) with Nigerian national oil company NNPC for the OPL 135 exploration license. The area lies northeast of the Niger Delta near the Kwale/Okpai treatment plants, operated by Eni.

The PSC has a duration of 25 years. The first five years will be devoted to the exploration phase, and the following 20 to development and production, with a contractual option of putting gas discoveries into production.

Produced hydrocarbons will be piped to the nearby Kwale/Okpai plants. Eni, through its Nigerian Agip Oil Co. (NAOC) subsidiary, operates the first power station built by international oil companies, supplying the national network with around 480 MW. The station, located in the Okpai zone and inaugurated in April 2005, is fueled by gas coming from oilfields operated by NAOC within the "zero flaring" project, which aims to eliminate gas flaring by the end of 2009.

Through this acquisition, Eni plans to promote increasing involvement of local companies in the exploration, production, and exploitation of gas for the domestic market, with the main objective of eliminating gas flaring.

The agreement allows for cooperation with the Nigerian partners, Eni says, both in the operations and technical management of the activities. The primary objective, says the company, is to support development of local competencies and resources.

Eni will operate OPL 135 activities through NAOC. Eni has a 48% stake in the block. Partners include Nigerian companies Global Energy Co. with 42% interest and BLJ Energy with the remaining 10%.

3/12/2007

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